A common issue for lenders following implementation of the TILA-RESPA Integrated Disclosure (“TRID”) Rule has been the context of construction loans. With the economy recovering in many parts of the country, construction is moving forward at a more rapid pace, and construction loans are more frequently issued than in years past.
The Consumer Financial Protection Bureau (“CFPB”) has now issued a short fact sheet regarding the application of TRID to construction loans. If construction phase lending may be converted to a permanent loan, then the two phases may be treated as a single transaction or multiple transactions for purposes of required disclosures. The Loan Estimate and Closing Disclosures under TRID must be issued accordingly.
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